What is a Business Angel? A
Business Angel (also know an an
Angel Investor) is someone who is
prepared to invest in a business to help it succeed. A
Business Angel is a
Venture Capitalist who will
provide considerable expertise and experience, as well as money, to
help ensure that the ventures they invest in are successful.

If you are looking for both investment and expertise to launch your
new product, realise your plans for business growth, or restructure
your business to make it profitable a Business
Angel
may be able to help.

What is Venture Capital?Venture
Capital is investment provided by outside investors (Venture
Capitalists) to finance a new, growing or recovering
business. Venture capital is usually provided in exchange for
a share in the business or its profits, rather than as a business
loan to be paid back with interest.

Venture Capital investments are seen as high risk, high return - if
a venture fails to perform as well as expected (between 20% and 90%
of the time), some or all of the investment may be lost, if it
succeeds, returns of 300-1000% may be possible! Venture
Capitalists are likely to require some involvement in the management
of the business to try to ensure it is successful and to provide
early visibility if performance is not going to plan. This
would typically take the form of a place on the board of directors.

How to Find a Business Angel.
The internet may help to find a suitable
Business Angel either
as an individual investor or as a member of a Venture Capital Fund or
Association - obviously some are better than others. Find out
what you can about them - What are their areas of expertise? What
other companies have they helped? What can they offer to your
business? However, they should not need to prove themselves
before they provide you with their money!

Having found or selected a potential Angel
Investor, you will need to
present and sell your ideas and plans to them to convince them that
your business is a good investment. Explain your ideas and
business models clearly, demonstrate that you have properly
researched the market and have a sound plan that just needs their
finance to fuel the profit machine. Try to be open and honest
- if they are to help they will need all the facts. Also be
prepared to listen - they will not be able to invest their expertise
if don't!

Business Angels will not be looking to stay involved in your
business forever. Typically they will look to "harvest" their
investment (or cut their losses), within about three to seven years,
by selling their shares, options or other forms of equity.